Continuing job growth underpins Colorado's economic projections

DENVER -- Colorado's economy should continue to strengthen next year, boosting the state's tax revenue and helping school funding, lawmakers were told Friday in the final tax projection of the year.

Economists from the governor's office and the Legislature were delivering their projections before lawmakers start writing budgets next year. One economist predicted the state would add about 60,000 jobs in 2014.

Even better, he said, federal fiscal policy seems more certain given Congress' recent budget deal. That has ripple effects for the states.

"We do not expect a significant disruption of economic activity" from a government shutdown or debt-ceiling breach, economist Larson Silbaugh said.

Colorado ended last fiscal year with a $1.1 billion surplus.

Friday's predictions for next year were generally positive, though the legislative economists' report showed a slight dip in anticipated taxes compared with their last forecast. The prediction still expects a surplus for next year, just a smaller one.

Most of the surplus will go to K-12 education, which suffered deep budget cuts during the recession.

Henry Sobanet, the economist for Gov. John Hickenloooper, said the governor wants education funding to be a top priority with extra dollars. The governor said the same earlier in the week when he briefed reporters.

Education funding will be a priority for Democrats in charge of the Legislature this year.

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That's because voters just rejected an income-tax hike to fund a school-finance overhaul, leaving lawmakers to piece together a school spending plan with money they already have.

They had better act quickly, another economist warned. Natalie Mullis told lawmakers that booming tax collections could soon trigger a constitutional requirement that surplus revenue be returned to taxpayers in the form of a refund.

Lawmakers and economists agreed the upcoming year will be a crucial one to repair the state's checkbook and backfill former budget cuts before the next economic downturn hits.

"Just because things are going better, we have to be very, very careful with our spending," said Rep. Cheri Gerou, R-Evergreen.

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